New study details challenges and recommendations for Detroit neighborhood small businesses

May 20th, 2015
Small business owner and ProsperUS graduate Isaac Brown

A new report examines the challenges that aspiring small businesses face in Detroit neighborhoods and recommends what needs to be done to overcome those challenges and make the neighborhood commercial corridors more conducive to small business success.

The in-depth report was released by ProsperUS Detroit and Michigan Community Resources and is entitled “Revitalizing the Corridor: An Analysis of Neighborhood Commercial Markets in Detroit.” The report studied five neighborhoods in particular: Cody Rouge, Grandmont Rosedale, the Lower Eastside, the North End, and Southwest Detroit. These neighborhoods are the target areas for the ProsperUS’ entrepreneurial training and lending programs designed to help ethnic and emerging small business owners.

Among the challenges that the report found:

  • Most of the patrons of neighborhood commercial corridors are residents who live nearby, do not drive, and make less than half the income of their neighbors. Those residents who have both the transportation and the financial means to shop outside the neighborhood usually do so.
  • Men are the predominant shoppers of neighborhood commercial corridors, whereas women tended to avoid visiting local businesses largely out of safety concerns.
  • Few neighborhood businesses attract patrons from other neighborhoods or surrounding suburbs.
  • The most prevalent business types in the neighborhood commercial corridors are businesses selling services, not retail goods.
  • Overall walkability of the corridors is poor, but there is generally ample parking available.
  • Neighborhoods lack adequate family-friendly businesses.

Among the recommendations that the report makes:

  • Improving safety and lighting is the most important factor to attract more customers from all demographics to the neighborhood commercial corridors.
  • Because women control nearly three-quarters of consumer spending, neighborhood commercial corridors must attract more middle-income female shoppers to be successful.
  • Neighborhood commercial corridors must improve pedestrian access and walkability.
  • A database of available commercial spaces and their condition should be established and be publicly available to assist prospective entrepreneurs and investors. In addition, a directory of local businesses should be created and marketed.
  • Local business associations should be formed to build community trust and advocate for the steps needed to promote business success.
  • Neighborhood commercial development should target and cluster at commercial nodes located at key intersections with significant vehicle and pedestrian traffic.

Realizing these recommendations, the report states, will take a concerted effort of City government, community-based organizations,residents and business owners.

“We hope this comprehensive research will be leveraged to implement strategies that match goods and services with the needs and wants of residents in particular neighborhoods, focus on developing commercial spaces where there are supporting and complimentary assets, and improve the resident experience of shopping locally,” said Kimberly Faison, director of ProsperUS Detroit.

The report is based on 861 customer questionnaires to gather shopper feedback, an external survey of 1,759 commercial properties to assess their condition, as well as interviews with business owners and community members.

ProsperUS contracted Michigan Community Resources (MCR) to develop the report to provide pertinent information to ProsperUS and other neighborhood-based entrepreneurs so that they can strategically locate their businesses to increase their chances for success.

“Partnerships like this are key for the revitalization of Detroit,” said Jill Ferrari, chief executive officer of MCR. “Our approach is unique, in that we are striving to build the capacity of community organizations to be more effective economic developers within their neighborhoods.”

An executive summary of the report is available on the Michigan Community Resources website. Detailed reports on the five target neighborhoods – CodyRouge, Grandmont Rosedale, the Lower Eastside, the North End, and Southwest Detroit – can be downloaded from the ProsperUS Detroit website by clicking those links.

The JPMorgan Chase Foundation and New Economy Initiative(NEI) provided financial support to develop the report.

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